Canadian retail chain Fire & Flower Holdings Corp. (TSX: FAF) (OTCQX: FFLWF) has plans to buy one of the country’s largest delivery companies in the cannabis sector, which would be the final piece in the firm’s online cannabis platform.
In a statement Thursday, Fire & Flower says it will pay for the deal by repaying about $5.3 million of Pineapple Express Delivery Inc.’s debt and issuing about 1,126,761 shares if the delivery company achieves “certain performance-based milestones in the fiscal 2022 year.”
For the trailing 12-month period ended Oct. 31, 2021, Pineapple Express’s revenue was about $10 million.
Acquiring Pineapple Express will complete the company’s proprietary technology stack, says Fire & Flower CEO Trevor Fencott.
“To our knowledge, this complete cannabis consumer technology platform is the first of its kind in the legal cannabis industry and will power our asset-light retail strategy, not just in Canada but across North America,” he adds in a statement.
In recent months, the firm has acquired cannabis platforms Wikileaf and PotGuide. And through the acquisition, Fire & Flower will be able to offer same-day delivery in “key” Canadian markets, using Pineapple Express’s existing fleet of vehicles, drivers and dispatchers through Fire & Flower’s retail chain.
The retail firm will also gain the CannDeliv platform, a propriety technology that Pineapple Express has been using.
In June, Pineapple Express partnered with Medical Cannabis by Shoppers Drug Mart to offer same-day delivery to patients in the Greater Toronto Area.
The company has targetted the fourth quarter for its Nasdaq listing and recently said it would be consolidating its shares on a 10-to-1 basis to qualify.
On Thursday, company stock dipped just over 3 per cent to $6.02 on the Toronto Stock Exchange.
Fire & Flower owns and operates Friendly Stranger, Happy Dayz and Hotbox brands, with retail stores in the provinces of Alberta, Saskatchewan, Manitoba, British Columbia and Ontario, and the Yukon territory.